(Civil.Ge) — Georgia’s central bank cut its key refinancing rate by 25 basis points to 6.75% on July 27.
“The decision is based on a macroeconomic forecast, involving gradual easing of monetary policy for achieving target inflation,” the central bank said. “If there no other factors emerge, the monetary policy rate is expected to be cut to 6% in a mid-term period.”
The central bank said that annual inflation in June slowed more than expected to 1.1%, far below of 2016’s target level of 5%.
It also said that the annual inflation will remain low in “following quarters” and expected to reach the target level by the end of 2017; next year’s inflation target is set at 4%.
NBG started tightening of monetary policy from February 2015 with the key rate gradually increasing in a course of last year from 4% in the beginning of 2015 to 8% by the end of last year. The key rate was remaining unchanged at 8% in the first three months of this year before cutting it to 7.5% in April.
Central bank’s monetary policy committee will hold its next meeting on September 7.